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The Honolulu Advertiser
Posted on: Friday, February 19, 2010

Bill eases rate jump for jobless insurance

Advertiser Staff

The state House of Representatives passed a bill yesterday aimed at reducing a scheduled jump in unemployment insurance rates.

If the law is not changed, the average annual premium paid by businesses will jump from $90 per employee to $1,070 this year. Under HB 2169, the bill that passed the House yesterday, the increase per employee per year would be trimmed by $440 to $630.

The average premium in 2011, which will be $1,520 if the law is not changed, will be reduced to $970 if HB 2169 passes.

The bill now goes to the Senate for consideration. Rep. Karl Rhoads, chairman of the Labor and Public Employment Committee, said he expects the Senate to pass some form of the bill although it may not be the same as what passed the House.

"HB 2169 will provide significant tax relief for businesses during this tough economic time while maintaining unemployment benefits for those who have been laid off through no fault of their own," Rhoads said in a news release.

The state has been warning of the hike in unemployment taxes since September. The tax increase is needed because the fund from which unemployment benefits are paid is dwindling rapidly.

The state's highest unemployment in more than 30 years is draining the fund and, by law, a tax increase will kick in to replenish it.